How to Calculate Lot Size for Indices
BY Created by TIOmarkets
|mayo 14, 2025Understanding how to calculate lot size for indices trading may seem confusing for beginner traders, but it’s a critical aspect of risk management that can not be overlooked.
Your lot size directly impacts how much you could potentially profit or lose on a trade and this can affect the overall performance of your trading strategy. So in this article, we'll explore how to calculate the lot size for indices, including the tick values, to help you trade responsibly.
Continue reading to learn more about the essential concepts and learn how to minimize trade execution mistakes.
How to calculate lot size for indices
There are various methods to determine the lot size when trading indices. Some traders refer to the average true range (ATR) to gauge price volatility, while others calculate the distance between their entry price and stop loss. Based on either of these measurements, they adjust their lot size according to their risk tolerance.
Regardless of the method you choose, grasping the concept of lot size for indices trading and how it relates to the value of a tick is crucial for managing risk. The knowledge contained in this article is essential to ensure you select the appropriate volume or lot size before executing any trade.
What is the lot size for indices?
The lot size for indices is the number of contracts you will be buying or selling. It depends on the indices contract specification on the trading platform.
| Indices | MT4 / MT5 Standard Lot size | Number of contracts per lot | Tick value |
| S&P500 | 1.0 | 100 | USD 1.00 |
| JP225 | 1.0 | 100 | JPY 100 |
| DE40 | 1.0 | 10 | EUR 0.10 |
| Dow Jones | 1.0 | 10 | USD 0.10 |
| Nasdaq | 1.0 | 10 | USD 0.10 |
| US2000 | 1.0 | 10 | USD 0.10 |
| FTSE 100 | 1.0 | 10 | GBP 0.10 |
| CAC 40 | 1.0 | 10 | EUR 0.10 |
| STOXX50 | 1.0 | 10 | EUR 0.10 |
| ESP35 | 1.0 | 10 | EUR 0.10 |
| SWI20 | 1.0 | 10 | CHF 0.10 |
| AUS200 | 1.0 | 10 | AUD 0.10 |
| AEX25 | 1.0 | 10 | EUR 0.10 |
| HK50 | 1.0 | 10 | HKD 0.10 |
| SSE50 | 1.0 | 10 | CNY 0.10 |
- One standard lot (1.0 lots) can represent 10 or 100 indices contracts.
- One mini lot (0.1 lots) represents one tenth of a lot, either 1 or 10 indices contracts.
- One micro lot (0.01 lots) represents one hundredth of a standard lot or 1/10th or 1 indices contract.
For indices where the price is denominated in a currency other than your account base currency, the tick value will require additional conversion based on the relevant exchange rate.
Understanding the contract specification for indices trading
The specific details of how to calculate the lot sizes mentioned above can be found in the contract specification. Here’s how you can find it inside the MT4 or MT5 trading platform.
- Right-click on any symbol in the market watch window.
- Select “Specification” from the pop-up menu that appears.
An example is included below and the highlighted rows are particularly important for understanding and calculating the lot size for indices.
Dow Jones (US30) contract specification
As you can see from the contract specification above, the contract size for the Dow Jones Industrial Average (US30) is 10 contracts per standard lot. Which means that whenever you select 1.0 lots in the volume field on the MT4 or MT5 trading platform, you will be buying or selling 10 indices contracts.
Further down the contract specification sheet, you will see the minimum volume, maximum volume and volume step information. The first two are self explanatory, they inform you what the minimum and maximum lot sizes are. In this case, the minimum volume is 0.01 lots, which is 1/100th of a standard lot (1.0). If 1.0 lots is equal to 10 contracts, then a volume of 0.01 is 1/10th of a standard indices contract. The maximum lot size for the Dow Jones on TIOmarkets trading platform is 10 lots or 100 indices contracts.
The volume step tells you the minimum increment or decrement you can enter on the trading platform. In this example, you can buy or sell in step increments of 0.01 lots or in other words, you can buy or sell from 0.01 lots, 0.02 lots, 0.03 lots, and so on up to the maximum volume or lot size.
How the lot size for indices trading affects tick values
As you have come to learn so far, the lot size for indices trading is the term used to describe the number of contracts that you are trading. The lot size is directly related to, and has a significant effect on the tick value. Which in turn, affects how much money you can potentially make or lose in the stock market.
Tick values for different lot sizes trading Dow Jones (US30)
| Lot size | Number of indices contracts | Tick value (USD) |
| 1.0 | 10 Contracts | 0.01 = $0.10 |
| 0.1 | 1 Contract | 0.01 = $0.01 |
| 0.01 | 1/10th Contract | 0.01 = $0.001 |
As a general guide, one full point in the index's price is worth 1 unit of the denomination currency for each indices contract traded. For example;
- One full index point price change in the S&P 500 is worth USD 1.00 per contract.
- One full index point price change in the FTSE 100 is worth GBP 1.00 per contract.
- One full index point price change in the DAX 40 is worth EUR 1.00 per contract.
The smaller the lot size, the smaller the tick value is and vice versa. As a result, your risk and profit potential will be less compared to when you are trading larger lot sizes or a higher quantity of contracts.
How to calculate lot size for indices trading
When you begin trading indices, one of the most vital steps is determining how much you're willing to risk per trade. Understanding how to calculate lot size for indices trading helps you align your trade volume with your risk tolerance. So if you are stopped out, you do not lose more than you initially intended. (Not taking slippage into account)
Let’s suppose you're prepared to risk $100 on a trade and you have decided that your stop loss will be placed 100 ticks away from your entry price. Using the formula below, you can easily calculate what the lot size should be to stay within your predefined risk tolerance.
Indices lot size calculation formula
Lot Size = Risk amount in USD / Stop loss in ticks
Lot size = $100 / 100 ticks
Lot size = $1 per tick
Let’s consider this example further because the tick value varies between indices contracts
Imagine the Dow Jones is trading at $4000.00 per contract, and you’re willing to risk up to $100 on a long trade. You have also determined that your stop loss should be placed 5000 ticks away at $3500.00.
To calculate the lot size, first find the tick value that you should be trading by dividing the amount to risk by the distance of your stop loss in ticks.
Lot Size = Risk amount in USD / Stop loss in ticks
Lot size = $100 / 5000 ticks
Lot size = $0.02 per tick
Lot size = 2 mini lots (0.2 lots or 2 contracts)
It is as simple as that.
Why lot size is so important for indices trading
The reason why you should know how to calculate lot size for indices, is because it directly affects how much you could potentially profit or lose on a trade. The higher your risk tolerance and amount to risk, the higher your lot size can be. Conversely, the lower your risk tolerance and amount to risk, the lower your lot size should be.
Lot sizes for indices trading can vary, so when trading indices, you first need to know how many contracts are in one standard lot and the corresponding tick value. This information is available on the contract specifications sheet inside the MT4 and MT5 trading platform. When you know this, calculating what lot size you should be trading for indices will be straightforward.
FAQ’s
Why is calculating lot size for indices so important?
Calculating lot size for indices trading is crucial for effective risk management, as it determines the potential profit or loss on the trade. By calculating the lot size you should be trading based on your risk tolerance, you can control your exposure and limit the losses on any single trade.
Can I change my lot size after placing a trade?
You cannot change the lot size of an open trade on a hedging account, but you may be able to on a netting account. If you wish to adjust your lot size once the trade has been executed, you will need to close the current trade or open new ones to achieve the desired lot size.
What happens if I use too large of a lot size?
Using too large of a lot size relative to your account balance can significantly increase your potential to profit, as well as significantly increasing the risk of loss.
Does the lot size affect the spread or commissions I pay?
The lot size does not directly affect the spread unless the volume is large enough to absorb the available liquidity in the market. The lot size does affect the commission you will pay and this is charged pro rata, per round turn lot. So the higher the lot size traded, the higher the commission will be.
How do I know what my maximum lot size should be?
Your maximum lot size should be determined by your risk tolerance and the size of your account balance. The trading community suggests risking a small percentage of your account balance on any single trade idea (e.g. 1-3%). You should calculate the lot size that aligns with your risk tolerance and the distance you intend to place your stop-loss from your entry price.
Are the lot sizes the same for all indices?
Standard, mini and micro lot sizes are common for most indices, but they can vary. You should check the contract specification for the symbol you are trading to confirm the number of contracts traded per standard lot size.
Is there a difference between volume and lot size?
On the MT4 or MT5 trading platform, the volume field represents the lot size. A volume of 1.0 means 1 standard lot, 0.1 means 1 mini lot and 0.01 means 1 micro lot. Volume and lot size are interchangeable terms that represent the quantity being bought or sold.
Where can I find the contract specifications for each indice?
You can find the contract specifications for each indices in the MT4 or MT5 trading platform. Right-click on the index's ticker symbol in the Market Watch window and select "Specification" from the menu. This will provide details about the standard contract size, minimum and maximum trading volumes, and other relevant trading information.
Learn how to calculate lot size in other markets
- How to calculate lot size for commodities
- How to calculate lot size in forex
- How to calculate lot size for stocks
- How to calculate lot size in crypto
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